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Category Archives: Economics

Sen. Kit Tatad Greeted Obama in Manila with a Blast from Helga Zepp-LaRouche

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Nov. 18, 2015 (EIRNS)– Former Philippine Senator Kit Tatad issued a scathing attack on Obama and fullsome praise of Putin and Xi Jinping in this morning’s Manila Times, the first day of the APEC Summit, quoting directly from the Press Club event featuring Helga Zepp-LaRouche and Senator Mike Gravel on Oct. 27. The op-ed is titled: “Let President Xi tell us about the new Silk Road,”

“So the Aquino government is determined to splurge ten billion pesos on the APEC Economic Leaders Summit and all its related lower-level meetings. At the same time, private firms are to be bled white by the forced shutdown of their operations and the cancellation of hundreds of international and domestic flights during the main event. Nothing could be more absurd and bizarre, but it could soon turn tragic if most of the summiteers fail to realize that inclusive economic growth, which they saucily long for, won’t happen unless the global casino economy is replaced by a new paradigm.

A new paradigm

Indeed, the world needs not just a paste-up job, but a new paradigm. No significant intervention has occurred since Lehman Brothers, with assets of over $600 billion, declared bankruptcy in 2008. None since the most vulnerable European economies began to flounder. None since Iraq and Libya lost their unwanted governments. Bail-outs in Wall Street and bail-ins in Europe saved the big banks but not the small depositors. Since 2008, the too-big-to-fail banks grew bigger by 40-80 percent, and enlarged their derivatives debt contracts to up to $2 quadrillion, said the founder of Schiller Institute Helga Zepp-Larouche in a recent address at the National Press Club in Washington.

There are no more tools in the toolbox of the financial institutions, Zepp-LaRouche said. So chaos could soon break out. For some international players, chaos, more precisely war, is the solution. They have invested so much in stockpiling weapons of mass destruction, including thermonuclear weapons with the capacity to kill the entire human population 20 times over, that they seem obliged to consider using them, regardless of the cost or consequence. But war can only translate into death and destruction [in] our clearly civilizational crisis.

The solution has to be something moral, social, political and economic. Mankind must recover from the global blurring of fundamental moral principles, the clashing political agendas and ambitions of men and nations, and the utter bankruptcy of the global economic system. The overindulgence of our sexual appetites, the unfettered desire by an unaccountable elite to impose their own ethic upon the rest, the resultant divide that sets apart the one percent at the top from the ninety-nine percent at the bottom of the pyramid — not these, but the opposite of these, are the pillars upon which our future civilization should be built.

Who will teach whom?

Which nation, and which leader of what nation, will drive home this point? And who has the best credentials to do it?

The United States, according to the renowned social-work educator Paul Adams in a book on social justice with Michael Novak and Elizabeth Shaw, was the first to lift a large majority of its poor (largely immigrants) out of poverty within a generation, and to keep on doing so. The United States was, as it were, the laboratory for how underdeveloped peoples break through the chains of centuries of poverty. It was the first developing nation. No one could argue against this.

US vis-a-vis China

But the record has shifted since. In the last seventy years since its founding, the United Nations, according to President Obama, has raised more than a billion poor people to the middle class. But it was former US Senator Mike Gravel of Alaska, who has pointed out in a paper he filed before our Supreme Court,that more than half of that number — 600 million, twice the total population of the United States — were Chinese. It happened within a little more than one generation or three decades; by adopting free-market capitalism while remaining communist, China — and not the United Nations — did it.

Poverty in the US

Today in the United States, by Zepp-La Rouches own reckoning, at least seven (7) percent of the population live in extreme poverty; some 21 percent have no access to sufficient food; 95 million have lost their jobs; and 104 million who are eligible cannot find jobs. In Europe, one-third of all the youth are unemployed; in the south of Europe alone, 60 percent are unemployed….

60 million refugees

Yet there is a new class of people whose problem is worse than sheer poverty. Many of them drown at the Mediterranean trying to flee the war, hunger, ethnic strife, unemployment in their own countries. These are the refugees….

Most powerful in history

But some leaders seem to be more concerned with projecting military might rather than manifesting compassion for the excluded and the marginalized. In his address to the 70th UN General Assembly on Sept. 28, 2015, Obama left the world gobsmacked when he said: “I lead the strongest military that the world has ever known, and will never hesitate to protect my country or our allies, unilaterally and by force where necessary.”…

As if to make sure that nobody missed this point, the US guided missile destroyer USS Lassen reportedly sailed within 12 nautical miles of one of the China-built land formations in the Spratlys while the Asean defense chiefs were meeting in Kuala Lumpur, together with US Defense Secretary Ashton Carter and his Chinese counterpart, Chang Wanquan.

Putin in contrast

Addressing the same UN General Assembly, Russian President Vladimir Putin took a different path. He decried the aggressive foreign interference that has resulted in a flagrant destruction of institutions and peoples lifestyle itself. Violence, poverty and social disaster have marred the growth of democracy and progress; “nobody cares a bit about human rights, including the right to life,” Putin said. In the Middle East and North Africa and elsewhere, anarchy areas have been created, which are now filled with extremists and terrorists, he added.

As though in anticipation of the Nov. 13 terrorist attack in Paris, which left over a hundred people dead and more than two hundred wounded, and prompted the Hollande government to declare a state of emergency, Putin proposed the creation of a genuinely broad international coalition against terrorism. He promised that under Russia’s chairmanship, the UN Security Council would convene a ministerial meeting to carry out a comprehensive analysis of the threats in the Middle East and seek to coordinate all actions against the Islamic extremists.

He proposed to restore government institutions in Libya, support a new government in Iraq, and provide comprehensive assistance to the legitimate government in Syria. And he asked that the international community now live without dividing lines, build on transparent and jointly formulated rules, including WTO principles stipulating the freedom of trade and investment and open competition, harmonize regional economic projects to promote the integration of integrations.

Finally, he offered a vision of the Eurasian Economic Union interconnecting with Chinas new Silk Road Economic Belt project to create a new development paradigm for the 21st century.

Xi Jinpings new Silk Road

The unexplained crash of a Russian passenger plane which killed all 224 passengers at Egypts Sinai Peninsula on Oct. 31 has prevented Putin from coming to Manila. But Chinas President Xi Jinping will be here. He should be encouraged to talk about China’s vision for the world economy. Supported by Brazil, Russia, India, and South Africa which, together with itself, constitute the relatively new economic bloc called BRICS, China has defined a 30-year vision to unite the worlds economies through high-speed railroads, roads and other fiber optic communications across the Eurasian land mass of Russia from western China to Europe, extending all the way north into the Scandinavian countries and South into Iran and the Arab countries. Its maritime component seeks to build efficient ports in strategic places to enhance the development of world trade.

The new bloc represents a power center based on economic growth, and above all, on leading-edge technology, including, for now, the exploration of the Moon to bring back to Earth large quantities of helium-3 for the future economy of thermonuclear.

Philippines Promises China: South China Sea Will Not Be on the APEC Agenda

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Nov. 12, 2015 (EIRNS)–In another sign that the Philippines has seen the writing on the wall, President Aquino is reported in the Philippine Inquirer today to have told visiting Chinese Foreign Minister Wang Yi that the South China Sea issue will not be on the agenda of the APEC Summit, which will be held in Manila from Nov. 17-19, with both Presidents Xi Jinping and Obama present.

The Inquirer article leads: “The Philippines will keep its mouth shut.”

Assistant Secretary of Foreign Affairs for the Philippines, Charles Jose, told the Inquirer there were two reasons: “We have a pending case before the United Nations; and it is not the proper forum,” since the issue was a security question and APEC is an economic forum.  He added, however, that other countries (without naming Obama) “have every right to raise it.  We cannot stop other countries from discussing issues that they consider important.”

Jose said that “the Philippines remains committed to being a good host and making the visit [of Xi] productive, safe and comfortable.”

Sen. Ferdinand (Bong Bong) Marcos Jr. said on Wednesday: “I think we should take every opportunity to talk to the Chinese, be it formally, be it informally.  We have to come up with a solution between the Chinese and the Philippines….  As long as the two sides are talking, there is hope we can find a peaceful solution to the territorial dispute,” he said.

Marcos is the son of the former Philippines President who was regime-changed by George Shultz in 1986. He is also the VP candidate running with presidential candidate Sen. Miriam Santiago. She was the Senator who successfully organized the Philippine Senate this week to vote that the agreement between Obama and Aquino to allow the US military occupation of Philippines bases, must be considered a treaty, and thus must be approved by the Senate — which could very well reject it.

A brief prepared by US Sen. Mike Gravel for the Philippine Supreme Court against the US military occupation, was introduced to the Court this week and is being circulated to the Philippine Congress and press by the Philippine LaRouche Society.

One reason the Philippines is trying to make amends with China was the report today from the Philippines Statistics Authority that the country’s exports plummeted by 25% in September from the previous September’s. Much of the decline was due to the fact that China accounted for just 9.9 per cent of exports for the month, versus a 28.9 percent share in September 2014, as China-Philippines relations deteriorated, due to Aquino lining up with Obama to confront China militarily.

Foreign Minister Wang Yi, meanwhile, did not mince words in his meeting with Aquino and Foreign Secretary Albert del Rosario.

“The key to solving this [the South China Sea issue] depends on the Philippines’ action,” Wang Yi said, “as it should undo what it has already done.  We hope the Philippines can make a wiser choice on this issue.”

China and Brazil Reach Agreement on Iron Ore Shipments

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Aug. 25, 2015 (EINRS)–Brazil’s Vale, the world’s largest exporter of iron ore to China, a few years ago ordered 35 new, giant “Valemax” ships (400,000 DWT–deadweight tons–bigger than any other cargo ship out there), and have already taken delivery on 30 of them from Chinese and South Korean shipbuilders. However, Chinese shipping companies, who feared being pushed out of the market by the highly efficient new Valemax carriers, got the Chinese government to prohibit docking of anything larger than “Capesize” ships (350,000 DWT) in Chinese ports. But Vale this summer reached an agreement with some of these Chinese companies; set up a 51-49 joint venture company with them that gave the Chinese the majority share; then sold four of the Valemax ships to the joint venture; and then had that company lease them back to Vale for 25 years. That way, everyone gets to share in the profit from the new ships. The first such ship docked at the port of Qingdao, China, on July 4, 2015.

The physical economic savings of the Valemax giants are significant–up to 15% overall–to Chinese steel producers who import the Brazilian iron ore. The big ships provide a 35% saving on fuel per ton transported; and they can save up to 15% on shipping time, which is reduced from 40 to 35 days by being able to dock directly in China, and not have to offload the ore to smaller ships in Subic Bay, Philippines, or other locations in Asia that Vale uses. Additionally, the Valemax ships can offload cargo twice as fast as Capesize ships.

And then there are the significant further savings in time and distance that will occur once the Nicaragua Grand Inter-Oceanic Canal opens in 2020–which, unlike even the expanded Panama Canal now under construction, will be large enough to handle Valemax ships. That will mean that the iron ore can be shipped {westward} from Brazil, through the Nicaragua Canal, and then across the Pacific to China–saving over 10% in time and distance over the current route across the Atlantic.

Philippines President Implements Obama’s Dictatorship by Foreign Bankers

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August 4, 2015 (EIRNS)–The well-known Filipino journalist and author Rod Kapunan, writing in the Manila Standard on Aug. 1, exposed the government of Obama’s puppet President Noynoy Aquino for allowing 100% foreign ownership of Philippine banks, which took effect on July 14. Kapunan shows that the bill implementing this policy explicitly breaches the Constitutional provisions designed to allow the development and functioning of Filipino-owned banks and businesses, which required 60% Filipino ownership “when national interest dictates.”

Kapunan references Glass-Steagall: “Foreign banks can now participate and do any business transaction by virtue of corporate takeover after foreclosure proceedings by their defaulting borrowers, thereby disregarding the limitation on ownership to aliens.  This is worse than the hated banking practice that was once prohibited even in the US under the Glass-Steagall Banking Act, which separated investment banking from commercial banking that has been blamed as the principal cause of the economic meltdown in the US, Japan, in Asia in 1998, in Mexico, Argentina, and today in Greece.”

TPP Also Aimed Against Influence of BRICS, Says Policy Expert

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July 24 (EIRNS)–Speaking at a hearing on the South China Sea before the House Foreign Affairs Committee on July 23, Patrick Cronin, a senior adviser to the Center for a New American Security (CNAS), indicated that the Obama trade boondoggle, TPP, was not simply a wedge against China, but against the growing influence of the BRICS. “Completing the Trans-Pacific Partnership can demonstrate America’s ability to complete complex free-trade agreements and regional architectures. We need to be prepared to bring more economies, from the Philippines to the Republic of Korea, into TPP, the first major multilateral trade agreement with a heavy focus on the new economy based on information technology and services,” Cronin said. “The United States can use TPP to gain leverage vis-à-vis BRICS nations regarding future rules for trade,” Cronin said.

He also called on the U.S. to develop programs which would help to undermine China’s plans for “One Belt and One Road.” “We can wait and see how complementary China’s Asian Infrastructure Investment Bank and its ‘One Belt and One Road’ will be to existing Bretton Woods institutions and other development initiatives,” Cronin said. But otherwise, he indicated that the U.S. should keep its powder dry.

He said that Administration programs such as the Lower Mekong Initiative were not sufficient to counter China’s initiatives. “Congress should request from the current and future administration a development strategy that includes proposals for new initiatives,” he said. “I have in mind a major international public-private partnership in support of human development in Asia. Rather than try to match China’s push for physical infrastructure, I would focus on the new knowledge economy, human capital and education, science and technology, and energy — all areas of comparative advantage for the United States.”

Cronin also called for more logistical support to the “other” claimants in the South China Sea disputes in pursuing their claims. The other speakers at the hearing provided much of the same, albeit not quite as in your-face as Cronin. Michael Swaine from the Carnegie Endowment showed some sense of reality, however, in urging the U.S. limit itself to clear parameters in discussing the South China Sea, i.e., calling for free navigation and no unilateral action by the parties.

Swaine also made it clear to Congress that the U.S. has got to understand that China will, by the very nature of its development, become a major force in the region, and that the U.S. ought no longer see itself as the sole proprietor in the Asia-Pacific region. He warned in particular against any attempt to allow Japanese ships to patrol in the South China Sea, a measure that has been mooted by this Administration. “Japan has no claims in the South China Sea and therefore no business being involved there,” Swaine said. “Their presence would only be a provocation.”

Swaine also underlined that there can be no objection to China building structures in the South China Sea or instituting an ADIZ in the region, as this remains a right of all nations. He also warned that if the U.S. begins to play a more direct role in asserting the claims of the other countries, it would have a negative effect all around and would prevent any agreement from being made. “The Southeast Asian countries would tend to demand more themselves with the U.S. behind their back and less inclined to compromise, and the Chinese would see this as U.S. meddling,” Swaine said.